Integration and Competition between Transport and Logistics Businesses
Some very large multinational transport and logistics firms have emerged to provide
integrated transport services to shippers in the globalised economy. Do these firms
escape regulatory oversight from national competition authorities because of their
sheer scale? Do they pose additional threats to competition when they merge with or
acquire other companies in the supply chain?
The Round Table brought competition experts together with researchers on maritime
shipping, rail freight and logistics to identify critical competition issues and appropriate
regulatory responses. An examination of the strategies of transport and logistics
companies reveals that vertical integration can yield efficiencies, but usually reflects
a need to improve the use of expensive fixed assets rather than control all parts
of the supply chain. This usually explains why shipping lines acquire terminal operators.
Horizontal acquisitions, where similar companies serving the same market merge, are
more likely to raise competition concerns. Problems are particularly prone to arise
at bottleneck infrastructure facilities.
The Round Table report provides an economic framework for examining competition in
global transport and logistics businesses, discusses the adequacy of the remedies
available to regulators when competition is threatened, and explores the role of competition
authorities and Transport Ministries in ensuring markets are efficient.
Published on February 26, 2010Also available in: French